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Do you adjust listings in the grid?

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PropertyEconomics said:
I will adjust for physical features, disclose that the property is not closed and I have not adjusted for probable selling price as I cannot predict the future and state the listings would tend to set the upper end of the market indication for these reasons. Where is that misleading?
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Maybe since the history in the market shows that similar homes sell for less than list. In any case, anyone that wants to throw stones had better RTFR or " I will strike down upon thee with great vengeance and furious anger those who would attempt to poison and destroy my brothers. And you will know my name is the Lord when I lay my vengeance upon thee.":)
 
Mr Rex said:
Maybe since the history in the market shows that similar homes sell for less than list. In any case, anyone that wants to throw stones had better RTFR or " I will strike down upon thee with great vengeance and furious anger those who would attempt to poison and destroy my brothers. And you will know my name is the Lord when I lay my vengeance upon thee.":)
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I love the quote Mr. Rex .. and I state within the report that the selling prices of the listings have not been established and the market suggests a range of ..... to ...... reduction is typical, however, as I am not a party involved in the listing I cannot predict with accuracy the eventual negotiated price and as such have not adjusted the listings for probable selling price. I dont think that is misleading either. I think we can all agree, well most of us anyway, that final concluded value is only supported by the listings.
 
OK.

Sales listing is provided to demonstrate current market conditions, and should not be construed as any indicator of current market value. Often times properties sell below, as well as above, the listing price. Appraiser cannot predict the motivations of parties involved in a trasaction that has not occurred yet. Every sale of a listed property is not guaranteed to occur at arm's length.

Adjustment made was to make a "cash equivalency" indication that realtor's commissions are often lowered or waived in the sale of a home. Houses that are not listed with realtors and often can sell at a reduced price due to the lack of commissions being paid to realtors. Furthermore, market data shows a consistent trend overall of sale prices being lower than that of the listing prices.
 
Danger Will Robinson!

Two things as I read this post (from a Reviewer!)

1. Difficult for a reviewer to argue effectively GLA adjustments unless they are just totally out of wack. The recently released AI class on Reviewing Appraisal states same thing - have to be very careful picking at adjustments, even with paired-sales. I can tell you in my market, I can proved an adjustment for GLA at $35 and as well at $55.

2. I do adjust sales. Here is the key to me. If you have a appraised value at $100k and your sales are at $90-95K - then I think you better have some very good commentary. To say the sales have no bearing - humm. Theory of substitution must be taken into consideration. Bottom line - if you include sales (and I think this is good appraisal practice) your appraised value should fall between the adjusted and unadjusted range for ALL comparables (sales and active).
 
By not adjusting the list to sales price differential, for comparable properties in the subject market area, your active listings will have a higher adjusted price, therefore, possibly allowing some appraiser's to lean towards the higher range of value, inflating the final opinion of value (not estimate)!

PE, by adjusting an active listing, wouldn't it seem reasonable that the adjusted price of that comp would be more accurate and closer to the final opinion of value than by NOT adjusting? In your example, maybe the comp does adjust to $210k, ultimately sales for $200, but by not adjusting, your report indicates $225k to the "general public" reader. IMO, adjusting the L/SP ratio just makes sense.
 
If your using a listing to test the market and most properties
sell for 90% of their list price, why wouldn't you adjust for
that typical relationship?
 
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